Law of Diminishing Marginal Utility

The principle of Diminishing Marginal Utility asserts that as the consumption of a good or service increases, the additional satisfaction derived from each additional unit diminishes. Marginal Utility, in this context, refers to the alteration in total satisfaction when one consumes an extra unit of the good or service. Put simply, the Law of Diminishing Marginal Utility in economics describes that as consumption rises, the incremental satisfaction gained from each additional unit decreases.